Spotify lands on Wall Street. The world's most popular music streaming platform will debut today on New York Stock Exchange with the "Spot" symbol in one of the most awaited technological quotations of the year and in a not exactly happy moment for the entire sector.
It will be an anomalous entrance, given that Spotify has opted for direct listing, which means that from today, April 3, the company's shares will go directly to the stock exchange for sale. A choice that has allowed the company to reduce payment costs (this method avoids subscription commissions, the involvement of banks and restrictions on the sale of securities) but has not provided any shelter from risks. It is unusual for a behemoth of this size to opt for a "direct listing", giving up the classic parachute. Until now, this option had only been followed by small companies active above all in the biotech sector.
In this case, one is not expected lock-up, a clause which obliges the issuing company and some shareholders not to carry out certain actions on the company's capital in the period following a public offer operation. Finally, by choosing the direct quotation, there will be no fixed starting price of the securities by Spotify. The market will decide the price, even if between January and February, the shares changed hands privately at a price between 90 and 132 dollars.
All the characteristics listed above could send the stock on a roller coaster from the first seconds of trading, with very high volatility. Based on forecasts, the actual opening of trading could be delayed beyond the standard two hours.
A few numbers: in 2017 Spotify totaled 159 million active users – of which 44% paying – revenues of 4,09 billion euros (up from 2,952 in 2016) and a loss of 1,24 billion euros.
According to estimates, in 2018 the company expects to reach up to 208 million active users, with 92-96 million subscribers.
